European stocks opened in the red on Tuesday after the long Easter weekend as the overlapping crises of the war in Ukraine, pandemic and inflation cloud the global economic outlook.
The FTSE 100 (^FTSE) fell 0.3% after the opening bell, while France’s CAC (^FCHI) tumbled 1.1% and the DAX (^GDAXI) lost 1% in Frankfurt.
World Bank chief Economist Carmen Reinhart warned that the global economy is passing through a period of "exceptional uncertainty". Citing an "array of disruptions" from lockdowns in China to soaring food prices amid the war, she added that she wouldn’t rule out further downgrades to the growth outlook.
On Monday, the Washington-based institution slashed its global growth forecast for 2022 by nearly a full percentage point, to 3.2% from 4.1%, due to the added economic stresses from the Ukraine crisis. President David Malpass said the bank is preparing a $170bn (£131bn) financial aid package in response to the coinciding global crises of war, pandemic and inflation that are hitting the poorest nations the hardest.
"Unsurprisingly the weak economic outlook, uncertain geopolitical situation and rising inflationary environment has prompted the World Bank to cut its 2022 global growth outlook," said Michael Hewson, chief market analysts at CMC Markets. "This move is likely to be followed by the IMF later this week as it gets set to meet in Washington."
"Its current estimate for 2022 is 4.4% which it set in January, with Europe and Central Asia likely to take the brunt, due to the Russian war in Ukraine, and COVID restrictions, respectively."
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